How to Select An Insurance Plan for Your Business in the UAE

In this chapter we decided to discuss with you all types of insurances, that you may require for your business. We will help you to understand, why this or that specific type of insurance is required, how the cost of insurance is calculated, who can assist you with insurance and more.

First, let’s start with how you choose your insurance service provider. It is a common practice to ask around and see, if your business partners or acquaintances can recommend someone. Alternatively, you can approach an insurance brokerage company, which works with a number of insurance companies and the broker will provide you with a number of options that you will be able to compare. Finally, if you have already built some relationships with a particular brand, you can always use services of that particular insurance company.

As a business, you might be interested to consider the following types of insurance:

1) office insurance,

2) workmen compensation insurance, AND

3) professional liability insurance.

Definitely, there are other industry specific types of insurance covers against all possible risks, however, we want to take a broader approach and review those insurances that any business shall consider. Now you will learn why.

Let’s start with the office insurance. Basic cover is a legal requirement everywhere. As you can understand from the name, office insurance would be required for those businesses, which conduct their activities from a commercial property. First and foremost, office insurance covers the content of the office from various damages. Depending on the amount you want to ensure the content for, the annual premium you will pay to the insurance company can be higher or lower. If you are a shop selling some high-value items, you may want to cover all your goods. However, if you are a consulting business with 4 to 5 computers in the office, your cover would cost much less, as compared to the shop we just mentioned, as the content value will be also much lower. Often office insurance includes liability insurance for commercial property. You may be responsible for any damage that you have caused to the office of your neighbor. For example, you may be responsible for any leakage, that results from a pipe that burst in your office and as a result you flood your neighbor’s office. The cost of your office insurance will depend on the content value you will specify and the limit amount for third-party liability.

Next you would require a workmen compensation insurance. Workmen compensation insurance is a mandatory protection by an employer of the employees against work related accidents or illnesses. This insurance protects you, the business owner, from claims of your employees in connection with injury or loss of income during the period, when the employee is disabled. This type of insurance is specifically important for entrepreneurs, involved in manufacturing, production or any other industrial business. Workplace injuries became more wide-spread and the dangers more apparent, when more people started working in factories with heavy machinery or in hazardous conditions. Workmen compensation was created to deal with injuries at workplace and compensations of lost income. In other words, workmen compensation provides workers who are injured or hurt on duty (or their families, in case the employee dies) with a predetermined level of compensation. The benefit of this type of insurance cover is that it takes away from you an extremely burdensome and costly process of litigation and at the same time provides guaranteed compensation for workers. Now you may be wondering, as to how the annual premium for this type of insurance is calculated. When you submit an application to the insurance broker or to the insurance company, you are usually requested to provide the following details for calculations: number of employees, their positions, their monthly salaries, the total of salaries per year and some other information. As such, insurance broker or provider calculates the premium based on how much your employees earn and how hazardous are conditions they are working in. For sure working conditions in the standard office are not that hazardous as, for example, in the factory. As such, to secure you from risks to be sued for illness or injury of an employee, whose illness or injury was caused by the job or can be attributed to the conditions of employment, your company shall arrange for a workmen compensation insurance.

The third type of insurance we mentioned at the beginning of the chapter was professional liability insurance. Professional liability insurance protects you from any losses another party receives due to your negligence because of the manner in which you provided a professional service, or by your failure to maintain professional standards. To put it simply, a failure to maintain professional standards would be, if you as a financial advisor give out bad advice that results in hefty losses and penalties for your client. Depending on the industry you work in and your profession, this type of liability insurance may have another name. If you are a professional, working, for example, in a medical field, this type of insurance would be called a medical malpractice insurance, there is also lawyers professional liability insurance, and some others. As such, professional liability insurance protects you and your company from claims of customers and clients to cover losses and costs related to you and your company’s undue performance of duties, which includes but is not limited to negligence, errors or omissions. This insurance usually covers all amounts up to the agreed limits of compensation which the insured is legally obligated to pay, including the cost of claims. Again, the cost of such insurance will depend on the amount you would like to insure your risks up to. The higher limit you want for your business; the higher annual premium you will receive from the insurance company.

We hope this chapter helped you to learn more about types of insurances you may want to arrange for your business. We also tried to share with you real life examples to understand, why this or that specific type of insurance would be required and in which cases. Now you will know, how to cover all potential risks in your company.

If you want to know more about Dubai freezone company formation, feel free to get in touch with our professional consultant team and we would be delighted to assist you and help you to compare Dubai freezone company setup costs and help you to find that free zone, which would suit your business needs the most.

Disclaimer: Business Boutique UAE-Consultants.com is not affiliated with any particular government or legal entity. Business Boutique does not give professional legal advice nor any other professional advice subject to a public office in the government. This article merely sets out a simple and basic idea as to the reasons of Dubai freezone company setup and Dubai free zone company formation cost. Business Boutique in no way holds nor imposes any official governmental or legal authority and the article herein is only to be taken as a guide. All further governmental or legal issues should be addressed to the corresponding authorities.

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